What is a co-op?
A cooperative is set up by a group of people needing goods or services. It is independent and democratically controlled by its members. The co-op serves its members or consumers at cost and is financed by those who benefit from it. There are producer cooperatives where the workers are the member owners and there are consumer cooperatives where the users are the member owners.

The control of the cooperative is by each member having one vote. In this manner, the operation of the co-op is subject to more popular control than most economic institutions allow. The members participate in the decision-making process, which determines the general strategy of their organization, including decisions related to the destiny of the additional resources, which result from any activities.

The members also maintain control of the business by electing their own Board of Directors. These board members, who must also be cooperative members, determine general policy. Decisions are not made based on who has the most wealth or land but how collective resources can best be managed to improve the welfare of the community as a whole. All workers have an equal say in what happens and share in both the benefits and the difficulties of the business.

Cooperatives are organized to:

Improve bargaining power

Reduce costs

Obtain products or services otherwise unavailable

Expand new and existing market opportunities

Improve product or service quality, and

Increase income

A co-op may be formed for the provision of goods or services to its members or for the marketing of members' products, goods and services to the general public. By working together for their mutual benefit in cooperatives, rural farmers are able to market and process crops and livestock, purchase supplies and services, and to secure credit for their operations.

The similarities between cooperatives and other businesses are that they both produce and provide services, as well as pay taxes. Cooperatives differ from other businesses in that they are wholly member owned and operate exclusively for the benefit of members, rather than to earn profits for investors. The differences between cooperatives and other businesses are often expressed as three broad principles that characterize all cooperatives and explain how they operate. They are:

The user-owner principle. The member-users own and provide the necessary financing. Members finance cooperatives in several different ways.

The user-control principle. The member-users control the business. They elect the board of directors and approve changes in its structure and operation. The board sets policy and is responsible for business oversight.

The user-benefit principle. Assures that the cooperative's only purpose is to provide and distribute benefits to members based on their use.

Benefits may include a service otherwise not available, advantages from volume purchasing or sales, or distribution of profits based on member use of the cooperative. The Seven Cooperative Principles are:

1. Open and voluntary membership - to all willing to accept the responsibilities of membership; the member service criterion provides for a more localized focus of activity, perhaps explaining why there is a low failure rate for cooperatives.

2. Democratic member control - active cooperative members each have one vote.

3. Limited interest (if any) paid on shares - this ensures that the operations are focused on servicing the members' needs. In the case of a trading cooperative, surpluses are normally distributed to members in proportion to business done with the cooperative.

4. Autonomy and Independence - cooperatives are autonomous, self-help organizations controlled by their members.

5. Education, training and information - cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives.

6. Cooperation between cooperatives - at a local, state, national and international level to enhance the cooperative movement.

7. Concern for community - cooperatives work for the sustainable development of their communities through policies accepted by their members.

The symbol of the United States cooperative movement is two green pine trees within a circle against a gold background. The pine tree is an ancient symbol of endurance and productivity; more than one pine signifies cooperation. On this emblem, the trunks of the trees continue into the roots forming a circle, which symbolizes the universal interconnectedness of us all.